What happens with taxes during government shutdown is one of the first questions taxpayers ask when Washington stalls. While the 2025 US government shutdown has disrupted federal agencies, the IRS continues to function thanks to special contingency funding. That means deadlines stay the same, payments are still due, and audits continue as scheduled.

Even though IRS systems remain online, shutdowns often lead to confusion and misinformation. Taxpayers, businesses, and accounting firms may incorrectly assume they can wait, delay, or skip payments. This blog breaks down what shutdowns mean for taxes, what steps individuals and organizations should take, and how to avoid costly mistakes while navigating taxes during shutdown periods.

If you have a specific question about setting up your tax payment during a government shutdown call our Tax Help Line: 1-877-8REMIT8.

What a Shutdown Means for the IRS and Taxes

The IRS is not like other agencies. While many departments furlough workers, the IRS obtains funding from other sources to keep itself running. While funding may not last forever, it’ll keep the IRS substantially operational for the time being. This means: 

• Electronic systems remain operational. E-filing, Direct Pay, and “Where’s My Refund?” continue functioning. 
• Refunds still go out. Electronic refunds are typically unaffected, though paper-based refunds may face delays. 
• Audits and enforcement continue. Unlike in earlier shutdowns, the IRS has confirmed that audits, appeals, and collections will go forward. 

However, as funding reduces and operations slow, paper is the weakest link. Mailed returns, amended returns, and paper checks stack up quickly during shutdowns, leading to long backlogs once operations fully resume. 

What to Do as an Individual Taxpayer

Individuals often think shutdowns give them extra time. That assumption is false. Tax laws don’t change just because Congress is at a standstill. If you want to avoid penalties, you must treat taxes during the US government shutdown like business as usual.

As an individual, during a government shutdown prioritize: 

1. Filing early and electronically. E-file paired with direct deposit is the safest way to ensure your return is processed without delay. Even if you’re on extension until October 15, filing sooner protects you from shutdown-related backlogs. 
2. Staying current on payments. Payroll withholding, estimated quarterly payments, and installment agreements continue as normal. Missing even one payment triggers penalties and interest. 
3. Using online IRS tools. Instead of waiting on phone lines, visit IRS.gov for transcripts, refund status, or payment setup. These systems remain unaffected by furloughs. 
4. Preparing for paper delays. If you filed or corresponded by mail, expect longer processing times. Paper is always the first casualty of a shutdown. 

What to Do as a Business

Businesses face complex filing requirements that don’t pause during shutdowns. With payroll taxes, sales taxes, and estimated corporate payments due regularly, a lapse in compliance can snowball quickly.

Here’s how businesses should manage taxes during shutdowns:

• Maintain bookkeeping discipline. Keep your records reconciled so filings are accurate and timely. 
• Prioritize payroll taxes. Missing payroll deposits not only draws penalties but can also damage employee trust. 
• Don’t use shutdown as an excuse. Enforcement continues, and penalties for late or missing payments can erode cash flow. 
• Partner with professionals. If you’re uncertain, lean on a firm or tax payment provider that can guide compliance and minimize errors. 

A shutdown may seem like a pause, but keep focus on your upcoming payment schedule to avoid fees and penalties.

What to Do as an Accounting Firm

Firms shoulder a dual responsibility: keeping their own compliance in order and helping clients stay calm. This is where your role as an advisor is critical.

• • Educate and stay educated. Clients may assume deadlines move, correct this assumption early-on to avoid slowed payments. Continue to stay updated with government shutdown news and send useful resources to clients.  
  • Manage expectations. Refunds, correspondence, and amended returns may take longer than normal. Setting realistic timelines reduces stress. 
  • Encourage digital-first filing. Guide clients toward e-filing and electronic payments to bypass paper bottlenecks. 
  • Document everything. If an IRS function is unavailable, record dates, calls, and attempts. This will be helpful later if you need to request penalty abatement. 
  • Use professional resources. Practitioner hotlines and the Taxpayer Advocate Service remain lifelines during shutdowns, though wait times may be longer.

• Onboard simplified automated tax payments: Start using Remitian so you never have to be on hold with the IRS again. Book a demo here. 

Common Myths About Shutdowns and Taxes

Misinformation during shutdowns can be as harmful as the delays themselves. Here are the biggest myths to avoid:

“Deadlines are extended.” 

Wrong. Shutdowns do not automatically grant extensions. Unless the IRS explicitly announces relief (usually only after disasters), dates remain fixed.

“Refunds are frozen.” 

Not true. Electronic refunds are processed by automated systems. Paper refunds may slow, but they don’t stop entirely.

“Enforcement pauses.” 

Incorrect. Audits, collections, and appeals continue, and notices are still issued.

Correcting these myths is essential to managing both client expectations and personal obligations.

How Remitian Helps During a Shutdown

At Remitian, we know that navigating taxes during shutdowns can feel overwhelming. Our platform is built to ensure that individuals, businesses, and firms never fall behind, no matter the circumstances. 

We do not use the Electronic Federal Tax Payment System, so our automated integration remains a viable alternative for registering your digital payments on time. 

Our clients also receive constant support through our Tax Help Line, where they can gain guidance from expert tax specialists. We even have access to Enrolled Agents (EAs) and Certified Tax Specialists we work with federally licensed tax experts who can assist and, if needed, communicate with the IRS on your behalf. 

Sounds like something you need? Connect with our team to learn more or call our Tax Help Line at 1 (877)-8REMIT8.  

Stay the Course, Shutdown or Not

So, what happens with taxes during government shutdown? In practice, not much changes: your deadlines, payments, and compliance requirements remain exactly the same.

For individuals, filing early and electronically avoids delays. For businesses, staying on top of bookkeeping and payroll taxes is critical. For firms, proactive client communication can prevent panic and protect reputations.

The 2025 US government shutdown may disrupt Washington, but it doesn’t stop your taxes. With preparation and trusted partners like Remitian you can navigate uncertainty confidently and keep compliance stress-free.